Friday Five – 6 October – 5 Questions in 5 Minutes

Welcome to this week’s Friday Five – 5 Questions in 5 Minutes Every Friday

What’s this all about?

It’s a bit of Friday Fun where we provide you with 5 questions relevant to a mix of CII exams. The challenge is for you to answer them in 5 minutes. Answers at the bottom of the page.

Questions

These questions relate to examinable tax year 2017/18, examinable until 31 August 2018.

1. Deliberately not paying due regard to the interests of a customer does not comply with which Statement of Principle?
   1. Organisation and control
   2. Integrity
   3. Market conduct
   4. Open and co-operative

2. Which of the following are tax advantages of investing in Venture Capital Trusts? Tick all that apply.
   1. Income tax relief of 30%
   2. Reinvestment relief for capital gains tax
   3. Tax free dividends of up to £200,000 per tax year
   4. 100% IHT relief after 2 years

3. Gemma is a higher rate taxpayer. She invested £100,000 into an onshore investment bond just over 8 years ago, which was segmented into 100 identical policies. The bond is now valued at £140,000. She would like to know how much she can withdraw from the bond with the minimum amount of tax liability. You tell her that:
   1. she can withdraw £500 from each policy without any tax liability
   2. she can withdraw £500 from each policy with a 20% tax liability on £50,000
   3. she can surrender 50 policies with a 20% tax liability on £10,000
   4. she can withdraw £450 from each policy without any tax liability

4. Joyce registered for Primary protection with a fund at A-day valued at £2m. Assuming a Lifetime allowance of £2.4m at the point when Joyce crystallises her fund, what amount can her fund build up to before any lifetime allowance charge is levied?
   1. £2.0m.
   2. £2.4m.
   3. £2.7m.
   4. £3.2m.

5. Systemis Ltd pays the premiums for a group personal accident and sickness insurance for their employees. How is this treated in relation to the company’s taxation?
   1. There is no tax advantage for the company
   2. They receive tax relief at 20% on the premiums paid
   3. The cost is deducted from their tax liability
   4. It is treated as an allowable business expense

Answers

1. B – See R01 Study Text, Chp 9
   Grab our taster mock exam paper for CII R01. Click here to download.

2. AC – See R02 Study Text, Chp 6:2
   Grab our taster mock exam paper for CII R02. Click here to download.

3. D – See R03 Study Text, Chp 10
   Grab our taster mock exam paper for CII R03. Click here to download.

4. D – See R04 Study Text, Chp 2:2
   Grab our taster mock exam paper for CII R04. Click here to download.

5. D – See R05 Study Text, Chp 9
   Grab our taster mock exam paper for CII R05. Click here to download.

How did you find this week’s questions? Did you complete them in 5 minutes? Did you get them all correct? Do you disagree with any?

Do let us know by leaving a comment below – we promise to read them all. (Humour particularly appreciated on a Friday!)